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The second annual seminar on “Owning and Operating an Urban Winery or Brewery” was held yesterday at the DoubleTree Hotel in downtown San Diego. The event was a huge success and a great learning experience for the 50 or so attendees who came. The first speaker was alcohol beverage law veteran Lynne Carmichael, who spoke on the permitting and licensing aspects of starting a winery or brewery. Wendell Lee, General Counsel of the Wine Institute, gave a rousing PowerPoint presentation on the ills of HR 5034 and the bill’s attack on the Commerce Clause. Seminar co-Chair Charles Reidelbach spoke on trademarking and labeling, while Anil Shrikhande, executive at Constellation Wines (and my father!), discussed the standards and profitability of various price points for wine. Later in the day, urban winery pioneer Michael Brill of Crushpad explained the bright future of urban “wine pubs” and the difficulties faced in starting a business of such. This was followed by keynote speaker Jack White, owner and founder of Ballast. His passion for the beer industry was obvious. In addition to those I have discussed, I’d like to thank all the other speakers for taking the time to come and share their insight. We are already thinking of ways to make next year’s seminar even better!

Wine Origins is a campaign funded by the European Union, France, and Portugal, to promote the importance of wine locations and protect the integrity of wine regions by assuring accurate labeling. The link to the feature is above.

Senate Bill 1101, recently passed unanimously in both the California Senate and Assembly, has now been made official by Governer Schwarzenegger. The new legislation will amend the previous policy that forced wineries holding winemaker dinners or instructional events at retail premises to serve wine straight from the barrel or tank, and not from bottles. This rule was part of a general scheme under the Alcoholic Beverage Control Act to prevent wine and other alcohol producers from gifting bottles. The purpose of rules such as this trace their descent to post-Prohibition “Tied-House” restrictions that required a separated three tier system of alcohol sales (manufacturer, distributor, and retailer being independent entities). This separation was meant to prevent monopolization in the alcohol business, promote temperance, and ensure proper tax collection by certifying that sales were conducted through the proper channels.

But the alcohol sales environment of today is much different than in the past, with exceptions in 37 states (including California) allowing a broad range of alcohol producers the ability to sell directly to customers or retailers outside of the three-tiered system. Today only a handful of truly large alcohol beverage companies exist, primarily Constellation, Diageo, and Gallo here in the U.S., whom, due to pressure and a close eye from the many regulatory agencies, follow tied-house restrictions fairly carefully. Today much of the power in the industry has been concentrated in large alcohol distribution companies and major retail stores such as Costco and Trader Joes, that many times dictate the business models of smaller wine producers. This power shift is one reason so many states now allow small winemakers to sell directly to consumers. Further, it makes overly burdensome measures like forcing winemakers to transport wine directly from the barrel to attendees of an instructional event less meaningful.

The new plan will limit tastings at these events to three per person, and will retain the rule that disallows the sales of bottles and transfer of gifts or free goods to consumers at these events.

When you’re one of the Napa Valley’s most high profile wines and getting shoutouts in raps from Jay-Z, you know you’re doing something right. Opus One is the brainchild of famous French winemaker Philippe de Rothschild and California wine guru Robert Mondavi. The two legends sought to craft a classic Bordeaux blend made with Napa Valley Cabernet Sauvignon, a combination of traditional French winemaking juxtaposed with California’s bold fruit flavors, and successfully did so for the first time in 1979. Constellation Brands bolstered their portfolio by acquiring 50% of Opus One in 2004 when they purchased Robert Mondavi, Inc. Last summer I was lucky enough to visit the Oakville winery, which is made of beautiful off-white limestone and built around a lush center courtyard. Their 2005 vintage “offers concentrated aromas of blueberry, rose petals, white truffle, licorice and nutmeg. Flavors of cassis, black olives, raspberry and dark chocolate (winemaker’s notes).” A bottle of this collectible wine will cost you around $150-$180 online, so you might have to crack open the piggy bank, but it would be well worth it for that certain special occasion. Below is an interview with Opus One CEO David Pearson from WineTasteTV.

Over the last few months I have been assisting in organizing a seminar to take place here in San Diego titled Owning and Operating an Urban Winery or Brewery. My supervising attorney at Higgs, Fletcher, and Mack LLP is the Program Chair, and I have been working aggressively with him to put together an incredible lineup of speakers from the alcohol beverage industry. Attorneys from some of the most successful alcohol beverage firms in the nation, as well as representatives from the Wine Institute, California Alcohol Beverage Control, and Constellation Wines U.S. will be speaking. In addition, the CEO’s/Presidents from Crushpad, Ballast Point, and Karl Strauss will also be speaking. The seminar will be beneficial to anyone involved in or interested in owning a brewery or winery. Attorneys who attend will also get CLE credit.

The seminar is set to take place November 10th, 2010 at the Doubetree Hotel in San Diego’s downtown Gaslamp District. The link above is to a PDF of the seminar brochure, and here is the link to The Seminar Group website for the event.

Wine producers and wine enthusiasts of Southern California should rejoice as San Diego County has finally eased restrictions on the establishment of tasting rooms for smaller “boutique” wineries. Local wineries that bottle less than 12,000 gallons per year will now be able to operate tasting rooms that offer retail sales. Also, wineries that bottle 120,000 gallons annually or less can now register under a new “small winery” classification which allow for pre-approved events to be held on the winery premise, such as weddings or other types of parties.

In the past, efforts to allow for tasting rooms were stunted by those worried about intoxicated wine tasters driving irresponsibly on the privately owned roads used to get to these wineries. A provision in the new ordinance now calls for those operating tasting rooms to work out easement issues with the owners of these private roads.

The new ordinance displays a conscious attempt on behalf of the San Diego County government to expand the local wine industry by streamlining regulations and making them more simple to understand. The movement was spearheaded by the Ramona Valley Vintner’s Association, who have been advocating this change in policy for many years. It is estimated that nearly half a dozen new tasting rooms will open by the end of this year. In addition to spurring growth in the wine industry, the project is aimed at increasing the already booming tourist business, and expected to boost the number of restaurants, cafes, and hotels to accommodate those seeking to explore the San Diego wine trails.

From a broader outlook, the move further strengthens a California wine industry which already makes up over 90% of the total U.S. wine business. As appellations like Napa and Sonoma became increasingly congested, winemakers sought to establish new wine destinations such as Paso Robles or Temecula. San Diego could be the next in line to achieve this status.

I was recently published in the July/August 2010 edition of Practical Winery & Vineyard, a prestigious wine industry journal. The article analyzes the recently introduced and highly controversial House Bill 5034, which would effectively shield state legislators from Commerce Clause restrictions when enacting laws regarding alcohol sales and regulation. Here is the link…